AB 816 PASSED BECAUSE OF YOUR SUPPORT!

Because so many of you signed the Coalition's petition below the legislators in Sacramento knew that their constituents, YOU, wanted to see more cooperative enterprises take root in California!

NOTE: If you'd like to keep up to date with future worker cooperative state or local policy initiatives, SELC's worker cooperative publications (like our legal guide for Cooperative Conversions), or receive invitations to educational events about worker cooperatives, please sign up below! Thanks!

500 signatures

What is AB 816?

AB 816 will help small businesses, create jobs, and empower California communities by providing a business entity specifically for worker cooperatives within the existing Consumer Cooperative Corporations Law.

How did people like you get involved?

They signed our petition below! We took the petition signatures to the California State Capital and told the assembly members and State Senators Californians wanted clearer paths to creating economic democracy at home!

AB 816: The California Worker Cooperative Act

AB 816 clarifies that the existing Cooperative Law applies to cooperatives in general, not just consumer cooperatives. It also creates more visibility for worker cooperatives and provides a framework for worker cooperative business formation. Worker cooperatives that organize under the amended Coop Law may elect to be governed as a worker cooperative, ensuring that workers will control the business in the future. AB 816 also raises the existing exemption from securities registration for the sale of memberships up to $1,000 (the current law only allows $300). That means you can crowdfund from your local community to invest (that's right, not donate, but actually invest!) in the creation and expansion of democratic, worker-owned businesses! AB 816 also provides strict guidelines for those outside investors regarding voting power and influence on the business.

AB 816 Provisions

We held an informational session regarding the 2015 Worker Cooperative Act on March 3rd, 2015 and recorded it for your viewing pleasure. Watch below at your leisure!

Supporters

Arizmendi Association of Cooperatives * East Bay Community Law Center * Network of Bay Area Worker Cooperatives (NoBAWC) * The Sustainable Economies Law Center * U.S. Federation of Worker Cooperatives * Democracy at Work Institute

Thank you for signing our Petition!

Those below added their names because they believe that cooperatives can build community wealth while providing just and dignified livelihoods. It was their voices that let legislatures know we not only want but demand more worker owned businesses in our communities!

NOTE: The first time you sign into SELC's website, if you uncheck "Send me email updates," you will be unsubscribed from ALL email updates from SELC.

Because of a new California law that passed last year, starting January 1, 2017, any worker cooperative corporation with seven or more members must now obtain workers compensation insurance for its worker-owners, even when everyone serves on the Board of Directors.

Although Assembly Bill (AB) 2883 was framed as a bill to clean up ambiguities in the code, it failed to take into account its impact on Cooperative Corporations. Many worker cooperatives are now being hit with enormous insurance bills costing worker-owners as much as 20% of their income. Prior to AB 2883, worker-owners had a choice in how this money was spent, sometimes setting it aside instead for higher wages that are paid directly to workers, or using it to provide comprehensive medical insurance. AB 2883 effectively takes this decision-making power away from worker-owners, undermining worker self-determination.

This article provides background, steps that cooperatives can take to respond, and information about the worker cooperative community’s current efforts to change the law.

Worker cooperatives around California are being impacted by a new law requiring worker-owners to purchase workers compensation insurance. As a result, many cooperatives will have to cut worker pay and benefits. Will you join us in the effort to change the law?

Background on the Current Workers Compensation Legislation

In 2016, the California Legislature passed AB 2883, making changes to the workers compensation law that failed to take into account and will have an adverse impact on cooperatives. Previously, workers compensation insurance was not required for managing owners of businesses. This is still true for LLCs and partnerships, but AB 2883 made a very significant change for corporations, requiring that an owner hold at least 15% of the shares in order to waive workers compensation coverage. AB 2883 failed to consider the impact on cooperatives where members manage an enterprise collectively.

Previously, some worker cooperatives in California chose not to obtain workers compensation insurance for managing owners, opting instead to apply those funds toward health insurance, long-term disability insurance, or higher wages. In some industries, such as in food businesses, the cost of workers comp insurance will reduce workers’ take-home pay by as much as 15%. One worker-owned cafe has reported that AB 2883 will cause the cooperative to lose $200,000 in 2017. This is a substantial setback for the worker cooperative movement at a time when worker-ownership has been recognized as a path to better and more stable livelihoods in California. The new Labor Code laws as passed under AB 2883 have major implications. Read our guide on how to navigate the new worker's comp law on our blog here!

What's Next?

Worker-owners of a handful of cooperatives, including The Cheese Board Collective, Three Stone Hearth, Home Green Home, Drought Smart, Arizmendi Bakery, and Echo Adventures Team, have convened to form a campaign working group to change the law. Right now, we are gathering support from other cooperatives and organizations impacted by AB 2883.

Sign the Petition

This petition will call on California legislators to pass a bill that would give cooperatives the right to opt out of the workers compensation requirement. The bill would essentially restore the previous provisions of the law in its application to Cooperative Corporations: In cooperatives where all members serve as officers or directors, those members will be allowed to waive workers compensation coverage.

By adding your name to the petition, you are indicating your support for a bill that would allow cooperatives to opt out of the workers compensation requirement.

Building an economy that is truly just and resilient means putting worker ownership at the forefront of economic development policies. Local governments can play a critical role in cultivating a friendly policy environment for worker cooperative development. The question for cooperative advocates is, where do we start? This page provides some helpful resources for jump starting local campaigns to promote and remove barriers to worker-owned businesses.

If you know of other local and regional policy efforts supporting worker cooperative development and would like those resources to be included here, please contact Ricardo at ricardo@theselc.org.

Sample City Worker Cooperative Ordinance

In 2015, the Sustainable Economies Law Center started building a sample "City Ordinance for the Promotion of Worker Cooperatives" with the support and collaboration of cooperative allies across the country. We used Oakland, California as a case city, and tailored the ordinance to fit Oakland's municipal code. By going through this exercise, we had created an ordinance that would lead to our local campaign, and created a model for others to use in other cities. To discuss the ordinance in more detail, please contact Sara Stephens.

In collaboration with our partners, we have compiled an informational packet aimed at educating local legislators about worker cooperatives and their local economic development benefits. We offer this here for cooperative advocates who aim to introduce policies to promote cooperative economies.

Packet includes: What is worker cooperative, economic and social benefits, how local governments can support business conversions to worker ownership, and more!

Oakland, CA

The Sustainable Economies Law Center worked with Oakland City council members and a coalition of supporters to introduce a Resolution Supporting the Development of Worker Cooperatives on September 8th, 2015. This resolution was an important step toward adopting a more substantial policy in that it publicly recognized the positive impact of the local worker cooperative ecosystem, and built momentum for the ordinance, which will be introduced in 2017.

Berkeley, CA

Following on the heels of the Oakland Resolution Supporting Worker Cooperative Development, the Sustainable Economies Law Center and our allies worked with Berkeley City Council member Jesse Arreguín to develop a Berkeley resolution to promote worker cooperatives.

On February 9th, after months of lobbying Berkeley City Council members, the resolution to was passed by a unanimous vote! Not merely a symbolic gesture, Berkeley's resolution directs City staff to develop a substantive ordinance that supports and incentivizes the growth of local worker cooperatives. The ordinance would add a worker cooperative preference to the existing Buy Local contracting preference, create business tax and land use incentives for worker cooperatives, and develop cooperative-specific educational materials to supplement the City’s business support services.

The Sustainable Economies Law Center is continuing to work with City of Berkeley staff to develop their ordinance, and we will publish relevant resources here as they are developed.

We also hear from our partners and allies across the country about efforts to build municipal level policies for the creation of economic democracy and community empowerment.While we may not actively work with these policy initiatives, we applaud their efforts and want to lift up their work. Find more information about those efforts below.

Santa Ana, California

On August 1st, 2017, Santa Ana became the first city in Orange County to adopt a resolution supporting worker cooperatives with the "Resolution Supporting Development and Growth of Worker Cooperatives". Santa Ana's median income in 2017 was $54,640 in comparison to Orange County's median income of $81,194. "A burgeoning worker cooperative movement in Santa Ana gained momentum in the form of a resolution" passed unanimously by city council, reported the OC Weekly. Find the adopted resolution here!

Austin, Texas

"On Thursday March 23rd, 2017 Austin City Council passed a resolution directing the City Manager to come up with a broad range of policies to support Austin's cooperative economy. The city manager will be working on these policies with input from the Economic Prosperity Commission, which passed a similar recommendation that also includes recommendations related to housing and consumer cooperatives. We hope that we can not only find ways to implement the above-listed policies, but convince the City that the Economic Prosperity Commission's recommendations should be included as well." Find more information about the Austin Cooperative Business Association here.

Other Resources

Another resource for communities working on policy initiatives is the Democracy at Work Institute, a national organization ensuring that the promise of cooperative business ownership reaches those communities most directly affected by social and economic inequality. Follow the links to find their resources on "Community Economic Development" and "Tools for Communities."

Join the movement of grassroots economic development advocates!

Do you want to stay up to date with our city policy work promoting resilient economies and worker cooperatives? Do you want to join the movement of worker coop policy activists pushing for an economy that is truly just? Sign up below to hear important updates and calls to action!

OAKLAND, CA (September 8, 2015) — The day after Labor Day, Oakland City Council made a bold proclamation in support of democratic and equitable workplaces, passing the “Resolution Supporting the Development of Worker Cooperatives In Oakland.” The Sustainable Economies Law Center championed this resolution in partnership with District 4 Councilmember Annie Campbell Washington, Council President and District 3 Councilmember Lynette Gibson McElhaney, and many organizational partners and allies.

We've come down to the wire!

The 2015 Worker Coop Act passed out of the California Assembly with bi-partisan support and passed out of the California Senate 39 votes to zero! Now it goes to Governor Brown's desk for his signature. BUT, there is still a chance that Governor Jerry Brown won't sign the Worker Coop Act.

After our month-long #PeoplePoweredEconomies campaign, the results are in: you rock! We continue to be motivated by a sense of both urgency and opportunity to create people powered economies everywhere, and YOU give us the inspiration and support we need to make that happen. This is what a People Powered SELC looks like:

The Sustainable Economies Law Center has worked to pass legislation to make it easier for small businesses, cooperatives, farms, and renewable energy projects to raise money from local investors and to enable California residents to move their money from Wall Street to their local community.

UPDATE:

AB 2751 stalled in the legislature in 2016. We faced numerous obstacles to passing the bill, including a lack of understanding about securities law and about small businesses' financing needs among lawmakers. After debriefing the situation with our allies in the campaign, we decided not to pursue another bill around local investing in 2017 because we predicted that we would face the same obstacles. We are shifting gears to instead provide more direct legal support to small business and organizations in utilizing existing community capital legal strategies available now, and to educating investors more on possibilities for local investing under our current regulatory landscape. We are open to working on future legislation to make local investing even more prevalent, but we have no immediate plans to do so. Read more about the work we are doing to help make more local investing happen in California on our Grassroots Finance program page here.

Learn more about the Local Economies Securities Act:

Click here to read a summary of the bill, background info, FAQs, and more.

Sign up below to stay up to date on the latest developments around local investing legislation in California and our other work around local investing.

We'll send out emails only when there are important developments with legislation that we are working on or supporting related to breaking down barriers to local investing, including opportunities to get involved, and resources for investors and businesses alike related to local investing. Giving us your mailing address will help us know to contact you if your Assemblymember or Senator sits on an important committee related to any such legislation. We won't send you junk mail, in fact, we rarely send paper mail at all!

Questions?

Please email Christina@theselc.org if you want to get more involved in advocating for local investing legislation or if you have questions or feedback about the legislation.

Seeds are at the foundation of human and animal existence on this planet. Since the dawn of agriculture, over 10,000 years ago, human have domesticated, bred, and selected plant varieties that provide us with nourishment. Indeed, saving and sharing seeds is one of the few unbroken traditions we share with our ancestors.

In the last century, however, the tradition of sharing seeds has been largely replaced as the dominant form of exchange by the buying and selling of seeds in the marketplace. As a result, in 2016, three companies control more than 50% of the commercial seed market. The consolidation of the seed industry has also led to a sharp loss in seed diversity around the globe. The UN Food and Agriculture Organization estimates that we have lost 75% of the world’s plant genetic biodiversity in the last century and that currently, nearly 75% of our food comes from just twelve plant varieties and five animal species. Studies show that seed genetic diversity is a key element of ensuring that our agricultural systems are resilient in the face of a number of social, political, and environmental threats.

In recent years, communities across the country have found a new home for continuing the age old tradition of seed saving and sharing - seed libraries and exchanges. Over 450 seed libraries, and countless more seed exchanges, exist in the United States, with many more in countries around the world. Seed libraries and exchanges offer people free access to seeds and promote genetic diversity and local adaptation to increase the resilience of the local food system.

So when we heard that seed libraries and exchanges were threatened with shut downs by state regulators back in June, 2014, we decided to do something about it. We researched these seed laws being applied by state departments of agriculture and found that, in some cases, these laws are being misapplied, and in other cases, that seed laws need to be changed to protect seed libraries' rights to share locally grown and saved seed. We launched the Save Seed Sharing campaign to promote people's rights to save and share seeds and to protect our seed commons.

Campaign Overview

Research

Created the Seed Law Tool Shed, a crowdsourced, publicly accessible database of excerpted state seed laws and analysis to support state level advocacy

Drafted sample legislation and local resolutions to change state seed laws to create clear legal space for noncommercial seed sharing

Education

Created an online petition, signed by over 20,000 people, directed to all 50 state agriculture departments raising awareness of the need to change state seed laws

Presented at over two dozen conferences to over 500 people about the importance of holding seeds as a commons and the challenges that state seed laws pose to the growth of seed sharing

Resources

Timeline

August 16, 2016 - Illinois passes amendment to state seed law to exempt seed libraries from state seed law requirements.

July 17, 2016 - At the 35th annual Seed Savers Exchange Conference & Campout, the steering committee of the International Seed Library Association reach an agreement with Seed Savers Exchange and USC-Canada to create the Community Seed Network as a joint project to support the national seed library community.

July 14, 2016 - AASCO votes to adopt an amendment, initially introduced by the Law Center and negotiated with several stakeholders, to the Recommended Uniform State Seed Law that creates exemption from testing, permitting, and most labeling requirements, creating replicable language that state legislatures can draw from when updating state seed laws. Read the text of the amendment here.

July 15, 2015 - The Law Center staff attend national gathering of American Association of State Seed Control Officials (AASCO) to advocate for changes to model legislation that creates exemption from testing, permitting, and labeling requirements for noncommercial seed sharing initiatives. The amendment is not accepted, but a working group is created to develop amended language including representatives from AASCO, SELC, seed libraries, and seed companies.

May 27, 2015 - Nebraska Governor signs into law legislation that exempts seed libraries from state seed law.

May 19, 2015 - Minnesota becomes the first state to pass a law amending the state seed law to exempt noncommercial seed sharing from testing, labeling, and permitting requirements, based on language developed by Sustainable Economies Law Center.

May 3-6, 2015 - First-ever International Seed Library Forum is held in Tucson, Arizona, hosted by the Pima County Public Library to bring together over 100 seed advocates to discuss the state of the seed library movement, state seed laws, and develop strategies for growing the national and international network of community-based seed sharing. The participants unanimously adopt a Joint Resolution in Support of Seed Libraries. The Law Center begins advising steering committee on creation of a backbone organization to support seed libraries, tentatively called the International Seed Library Association.

November 11, 2014 - With support from the Clif Bar Family Foundation, the Law Center launches the Save Seed Sharing campaign with national online petition to spread awareness and build support for legal protections for seed libraries and other community-based seed sharing initiatives. The petition eventually receives over 20,000 signatures.

August 11, 2014 - The Law Center co-publishes article with Shareable and Center for a New American Dream outlining the need to change state seed laws to protect community-based seed sharing activities. The Law Center also launches the Seed Law Tool Shed, a publicly accessible, crowdsourced database of state seed laws and analysis.

June 12, 2014 - Pennsylvania Department of Agriculture sends letter to Simpson Library in Mechanicsburg, informing the library staff that their plans to open a seed library violate the state seed law.